As Wall Street closes the books on Q3, a frightful future may lie ahead.

More layoffs are on the way for the big banks, according to prominent bank analyst Glenn Schorr.

The Nomura analyst in a recent report warns that many banks, which are still overstaffed, need a more liberal wielding of the ax to squeeze out more profits in the coming years, amid a global market that continues to look sluggish.

“While overcapacity is weighing on returns under the current environment, most bank managements have been in the camp that the industry is currently experiencing a cyclical rather than secular downturn,” Schorr writes.

“So they’ve been slow to do too much on the head-count front,” the bank analyst said regarding layoffs.

According to Schorr’s research, big banks like JPMorgan, Credit Suisse, UBS and Barclays have actually added jobs over the past three years. Goldman Sachs and Morgan Stanley have only slashed about 1 and 2 percent of their work forces, respectively.

Already, banks have slashed some 26,887 jobs in 2012 through August — that’s 18 percent more than jobs eliminated last year, according to research firm Challenger, Gray & Christmas.

As far as performance goes, 42 percent of market experts are predicting that overall bank revenues for the full year 2012 could be down by as much as 5 percent compared with last year.

The economic headwinds that have been battering once high-flying banks including JPMorgan, Bank of America, Goldman and Morgan Stanley will cause them to generate single-digit returns on equity compared with the 20 percent ROEs some enjoyed during boom times.

One bank offering a window into results was BofA, which said that it may take a roughly $3 billion hit to its bottom line from a $2.3 billion settlement as well as an accounting adjustment resulting from an improvement in its credit spreads.